In this article, Anton Kuchukhidze, Head of the Ukrainian Gambling Council, talks about the importance of combating illegal gambling for the development of the regulated gambling sector in Ukraine. An effective fight requires improved legislation, he emphasizes.
Legal gambling operators suffer from lottery activities that create unequal conditions in the market. Lottery operators do not purchase expensive gambling licenses and, using legal loopholes, emulate gambling on their online platforms.
Moreover, they establish partnerships with land-based illegal operators and, under the guise of lotteries, actually create an imitation of gambling in slot machine halls in illegal gambling establishments. Between 2013 and the end of 2019, lottery operators deployed a network of «instant lottery halls». Without adequate government control, this situation may repeat itself.
To prevent lottery operators from simulating gambling without paying the appropriate license fees, a number of legislative changes needs to be made:
- Lottery operators have been running instant lotteries that simulate gambling for a long time. The ban on establishing so-called «Internet cafes» with access to lotteries should also apply to the websites of lottery operators, including state ones, since the law currently makes an exception for them.
- It is necessary to strengthen control over state lotteries and provide the authority to the relevant body not only to enter lotteries into the Unified Register of State Lotteries, but also to refuse operators to enter lotteries into the register. At the moment, the legislation dictates the authorized body to enter lotteries into the register within a specified period of time after receiving a corresponding request from the operator of state lotteries.
- Current legislation does not limit the distribution of instant lotteries via the Internet. At the same time, this type of lottery in the classical sense does not need to be distributed via the Internet at all. However, lottery operators are actively using this loophole in the law to conduct instant lotteries on the Internet, which is actually an imitation of playing slot machines. Therefore, restrictions must be introduced.
- The law prohibits the reproduction in any form of the process of spinning the reels, which outwardly imitates the process of playing a slot machine. However, it should be prohibited not only to reproduce the process of spinning the reels, but also any other drawing processes that superficially imitate the drawing process on a slot machine.
- The liability of lottery operators for violation of license conditions should be strengthened and the criteria for revocation of lottery licenses, which at this stage are legally limited, should be expanded. Legislation in the area of unscheduled inspections of lotteries should also be tightened.
These technical legislative changes are of strategic importance for the legal gambling market in Ukraine. Limiting the ability of lottery operators to imitate gambling will not only increase competition in the legal gambling sector, but will also increase government revenue.
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